Cuts to State Spending

Kentucky Governor Steve Beshear is ordering most state agencies to cut their budgets by two percent for the current fiscal year, but that will not be enough to close a $190 million budget shortfall. The decision was announced by State Budget Director Mary Lassiter at a joint budget committee meeting Tuesday. The plan will not include furloughs for state employees as the governor previously ordered, but it could mean agencies deciding to laying off workers.

State lawmakers mandated the governor make the cuts in this year’s budget, but the additional 2 percent cuts will save only $29 million. Several of the cuts are being made to “non-priority” programs since the administration has exempted the Department of Corrections, Medicaid, public schools, state universities and student financial aid.

Lassister told the committee another $60 million in savings will come from funds that were originally appropriated to meet debt service on building projects that will not be needed. Another $75 million is anticipated to come from a revenue surplus, but lawmakers are still concerned that additional cuts will have to be made during the General Assembly next year.